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Radar: Disruptors in Health Benefits Stocks (NYSE: CNC) (OTC US: LVGI) (NASDAQ: HQY)

By: OTC

With the transition to the Biden administration, the policy footing for the future of healthcare is veering once again. But no matter how you slice it, the future is about more flexible care with a greater diversity of end-market options, and the decreasing viability of a one-size-fits-all solution to managing policies.

With that trend comes more pressure on the overall healthcare system to find new ways to minimize costs and take greater advantage of home care and telehealth options to reduce inpatient costs and create more wiggle room for coverage. It also implies the inevitability of more bespoke solutions for employers.

While the pandemic has been tragic and devastating, it has at least advanced the evolution of policy and care infrastructure on these fronts, opening up a more interesting and potentially profitable future for new growth investments in the health plan marketplace.

With that in mind, we take a look at some interesting names in the space, including: Centene Corp (NYSE: CNC), Limitless Venture Group Inc. (OTC US: LVGI), and Healthequity Inc. (NASDAQ: HQY).

 

Centene Corp (NYSE: CNC) promulgates itself as a leading multi-national healthcare enterprise that offers affordable and high-quality products to nearly 1 in 15 individuals across the nation, including Medicaid and Medicare members (including Medicare Prescription Drug Plans) as well as individuals and families served by the Health Insurance Marketplace, the TRICARE program, and individuals in correctional facilities.

The Company also serves several international markets, and contracts with other healthcare and commercial organizations to provide a variety of specialty services focused on treating the whole person. Centene focuses on long-term growth and the development of its people, systems and capabilities so that it can better serve its members, providers, local communities, and government partners.

Centene Corp (NYSE: CNC) most recently announced its creation of “the Centene Institute Youth Impact Award for Vaping Prevention”, which apparently is “a curriculum and contest for adolescents ages 14 through 19 to raise awareness about vaping, e-cigarette use and prevention.”

According to the release, as part of the challenge, students will learn about the vaping national public health epidemic and be empowered to take action by developing and submitting a 30 to 60-second Public Service Announcement (PSA) video to educate their peers about the dangers of vaping. The contest is accepting submissions from January 19 through April 16, 2021. Winners will be announced in early summer of 2021.

Even in light of this news, CNC has had a rough past week of trading action, with shares sinking something like -9% in that time. That said, chart support is nearby and we may be in the process of constructing a nice setup for some movement back the other way.

Centene Corp (NYSE: CNC) generated sales of $29.1B, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of 5% on the top line. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities.

 

Limitless Venture Group Inc. (OTC US: LVGI) is a holdings company that has launched an active roll-up strategy in the healthcare benefits space. The company has already completed three majority acquisitions since May of last year after shifting strategies and, according to recent communications, appears poised for two more, and a likely path to new record topline performance in the process.

Limitless Venture Group provides its shareholders with access to leading small and medium-sized businesses focused on growth. Leveraging its permanent capital base, disciplined long-term approach, and actionable expertise, LVGI owns controlling interests in its subsidiaries as it partners with management teams to build businesses with the capacity to unlock significant value for its shareholders.

Limitless Venture Group Inc. (OTC US: LVGI) recently put out a shareholder in which it outlined its overall model and where it’s headed. Key to the discussion was this passage:

“We are actively engaged with two (2) prospect acquisition targets in the same broad space, and we have the financial backing to allow us to proceed with fresh deals and continue to scale this strategy. Our goal right now is to close one new high-quality acquisition in line with this strategy each quarter over the next thirty-six months and beyond. Our recent strategic partnership with Nexus Insurance Marketing Group, LLC, is another strong piece of that puzzle. As I recently outlined, we have a three-year topline projection for this space of acquiring 104,000 employee-lives under management. Based on our analysis, that has the potential to generate annual revenues of approximately $55 million.”

The stock is a bit thin, but has been a strong performer of late, doubling this month on growing volume as the crowd starts to take notice.

Limitless Venture Group Inc. (OTC US: LVGI) has put in place the potential for strong topline growth, as noted above, as it begins to reap the benefits of its recent acquisitions, which are positioned to drive cash flows from operations in 2021.

 

Healthequity Inc. (NASDAQ: HQY) bills itself as a company that administers Health Savings Accounts (HSAs) and other consumer-directed benefits.

The company serves more than 12 million accounts in partnership with employers, benefits advisors, and health and retirement plan providers who share its mission to connect health and wealth and value its culture of remarkable “Purple” service.

Healthequity Inc. (NASDAQ: HQY) most recently announced it will provide final sales results for its fiscal year 2021, on February 8, 2021, while providing estimates of HSA members, HSA assets and Total Accounts for its fiscal year ending on January 31, 2021, and raised its outlook for HSA cash yield for fiscal year 2022.

According to the release, the company’s estimated HSA members are expected to be in a range between 5.7 million to 5.8 million by January 31, 2021, up from 5.3 million a year earlier. Its HSA assets are expected to be in a range of $13.6 billion to $13.8 billion, up from $11.5 billion at the end of the prior year.

And the stock has been acting well over recent days, up something like 10% in that time.

Healthequity Inc. (NASDAQ: HQY) managed to rope in revenues totaling $179.4M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 14.2%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($299.4M against $151.4M).

 

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